Public-Private-Partnerships

As fall comes to a close, my research on “Community Arts Organizations and Sustainable Practices: A Collaborative Model” is focusing on the organizational structure of Materials for the Arts. MFTA is a public-private partnership (known as a PPP) with the NYC Department of Cultural Affairs and the benefit donor group, Friends of MFTA.

I continued to research this unique business model, and formulated questions. What is a public-private partnership? Why would an organization want use this model? How does this model differ from a public corporation involved with corporate social responsibility, a not-for-profit organization, or a government organization?

Through my research, I discovered that a public-private partnership is a government service or private business organization that is funded and operated through a partnership between government and one or more private companies. With that in mind, Materials for the Arts completely fit this definition: it is a government service (NYC Department of Cultural Affairs) funded and operated through the partnership of the donor group (Friends of MFTA).

Furthermore, I discovered the two fundamental “drivers” for public-private partnerships. These two “drivers” focus on a) giving a mindset of gaining a “profit” in the long-term for the organization, and b) finding the appropriate capitalization and funding to implement the mission of the organization. With these two “private sector” characteristics, the public organization becomes more effective and efficient in executing its mission without having to appease “shareholders” with profit, but rather “stakeholders” with its mission.

First, the public-private partnership model enables public sector organizations, such as a government organization like Materials for the Arts, to harness the expertise and efficiency that could be found in the private sector. With the “bottom line” in mind, Materials for the Arts could sustain its model over a long period of time. The other “driver” for a public-private partnership is the very structure of the business model in terms of long-term revenues. Since Materials for the Arts does not want to make an investment by borrowing money and utilizing tax dollars, it relies on the private organization to borrow money, in return for an “off-balance sheet” method of financing its assets, or a tax deduction under the laws governing corporate social responsibility.

Dr. Lant and I are meeting with Harriet Taub, the Executive Director of Materials for the Arts on Thursday, December 12th, to examine how MFTA distributes to artists, not-for-profits, and education organizations in a process called “Shopping Day.” We also are interviewing Harriet Taub on MFTA from a managerial perspective, which will give us insight on the internal workings of MFTA, as well as its strategy going forward. . We also will distribute surveys to customers on that day, finally resulting in our quantitative results. I look forward to the interview!